Economist champions carbon credits for ag lands

An agricultural economist advocates for farmers and ranchers to receive credits with a monetary value for the carbon their acres absorb.

By John O’Connell

Capital Press

Published on December 9, 2013 12:31PM

The dean of New Mexico State University’s College of Agricultural, Consumer and Environmental Sciences sees a financial opportunity for farmers and ranchers in future federal climate change bills.

Lowell Catlett encourages the agricultural community to participate – if and when discussions about cap-and-trade energy policies are resurrected – so that crops, healthy soils and range land receive credits for the carbon they sequester.

Under cap-and-trade, polluters receive marketable credits, redeemable by other emitters of greenhouse gases, for reducing emissions. Catlett believes “offset” credits for carbon absorbed by agricultural lands should be sold through the same exchanges.

Catlett will share his ideas on pollution offset credits and other ways agricultural producers can be “price makers rather than price takers” Jan.10 during the National Potato Council’s Potato Expo 2014 in San. Antonio.

Catlett emphasizes agricultural lands, forests and oceans are the world’s major sources of carbon sequestration.

“If we are going to have a marketing system and be serious about pulling carbon out of the atmosphere, we have to have at the table the only active people who are sequestering carbon on a regular basis and can prove it, and that’s farmers,” Catlett said.

From 2006-2009, farmers and ranchers from 35 states were paid $10 million for offset credits that companies bought on the expectation of cap-and-trade legislation, which never materialized. Dale Enerson aggregated credits from producers throughout the country as director of North Dakota Farmers Union’s carbon credit program. The offset program was set up by the Chicago Climate Exchange, which awarded credits for practices including no-till farming, conversion of crop land to grass land and prescribed grazing. Farmers had to enroll in five-year contracts to receive the credits.

The market for credits dried up in 2009. That year, the U.S. House of Representatives passed the American Clean Energy and Security Act, which included language for a domestic offset program involving agriculture, but the bill failed in the Senate. The roughly 400 U.S. companies that had been active in buying the offset credits ceased their purchases, with Enerson still holding 7 million tons of unsold carbon credits, when it became clear no cap-and-trade system was coming.

Enerson remains hopeful that California’s new cap-and-trade program, which has enforceable compliance starting on Jan. 1, may eventually include offsets from agriculture. For now, California’s program covers forestry and methane digesters used for dairy waste, but no crop or range practices. Enerson doesn’t anticipate federal cap-and-trade legislation forthcoming any time soon.

Enerson prefers a cap-trade-system to a simple carbon tax, which would charge farmers for consuming fuel with no reward for the carbon their acres absorb.

Dan Weiss, director of climate strategy with the Center for American Progress, advocates for offset credits only if producers implement new agricultural practices. Otherwise, a program wouldn’t improve the environment, he said.

The Environmental Protection Agency is scheduled to propose rules for reducing coal-fire power emissions by June 2014. Weiss noted individual states will be granted options for meeting those reductions, which could include statewide cap-and-trade systems with agricultural offset programs.